Bush cuts hit Democratic states, analysis finds

By Susan Milligan, Globe Staff | February 12, 2005

WASHINGTON -- Massachusetts and other traditionally Democratic states would see their share of federal grant money shrink under President Bush's 2006 budget, compared to Republican states in the South and West, according to a Globe analysis of funding projections compiled by the White House budget office.

Critics and defenders of the president's $2.6 trillion budget say they do not believe the budget proposal represents a deliberate attack on states that voted for Democrat John F. Kerry, but rather that Bush's budget priorities tend to hurt those states that rely more on the health, community development, and housing programs that are targeted for reductions.

The result is that the highest percentage increases in state and local grant money would go to Arkansas, North Carolina, Arizona, and Missouri, while New Hampshire, Wisconsin, Hawaii, and Vermont would be among the states with the smallest increases. Massachusetts -- with a projected 1.9 percent increase -- is tied for 35th, while liberal-leaning California and Washington state (along with conservative-leaning North Dakota) would see a reduction in federal grants next year.

With the proposal to eliminate or reduce funding for home-heating assistance, the Northeast would be especially hard hit by the president's budget-cutting, said Senator Jon Corzine, Democrat of New Jersey.

''People will ask me whether I think it's political or not," Corzine said. ''I think it's just the philosophy of this administration not to have the government involved."

Representative Barney Frank, a Newton Democrat, said that while the budget may not have been designed to hurt Democratic-leaning ''blue" states, ''they can do it without trying," because many of the budget cuts tend to hit urbanized areas. ''It's not just red state/blue state, but blue communities within the red states," he said. ''Their ideology reflects that."

Chad Kolton, a spokesman for the Office of Management and Budget, said much of the trend is due to demographics. ''It's not a reflection of any political decision, by and large, because these tend to be mandatory [funding] programs," such as Medicaid, he said. Kolton and independent budget analysts also noted that the funding projections do not include Bush's proposed cuts in farm assistance, a highly controversial idea that -- if approved by Congress -- would probably hit rural, Republican-voting states with large grain farms the hardest.

But representatives of Northeastern states note that the funding projections also do not include the proposed elimination of Amtrak funding -- which they say could hurt the Northeast where the train service is most popular -- or increases in defense spending, which tend to favor the South and West because of the large number of military bases in those regions. In all, they say, the budget heavily favors Republican-leaning ''red" states, which constitute 19 of the top 25 states to receive the biggest percentage increases.

Northeast and industrial states historically have benefited from the types of programs that Bush wants to cut, such as urban block grants, home-heating assistance and Medicaid, said Matt Kane, an analyst with the Northeast-Midwest Institute, a nonpartisan group that advocates for the region in Washington.

Community Development Block Grants, one of the federal Department of Housing and Urban Development's oldest programs that helps distressed communities with economic development, have helped the Northeast, since funding relies partly on the age of a city's infrastructure. That and other factors have tended to steer money to cities like Boston, which this year got $23 million.

Under the Bush budget, block grants would be combined with 18 other community development initiatives, and overall funding would be cut to $3.7 billion from $5.4 billion. Boston would lose an estimated $8 million, according to projections by the staff of Senator Edward M. Kennedy, Democrat of Massachusetts.

Further, the formula would change, directing aid toward high-poverty areas and making it harder for relatively prosperous Massachusetts to get money, Kane said.

Kolton said the block grants were being cut because too much of the money was going to prosperous areas that did not need it. He said the scaled-down program would help bring the program back to what it was meant to be -- aid to struggling communities.

Brian Reidl, a budget analyst with the conservative Heritage Foundation said the block-grant program has been expanded to win the support of more members of Congress, and should be targeted more closely to help the poor. The program ''ends up funding wasteful projects local governments wouldn't dream of wasting tax dollars on," he said. ''It's not as much of a poverty program as it is a pork program."

Meanwhile, the Clean Water State Revolving Fund, a loan program that helps states improve their wastewater treatment systems, would be trimmed to $730 million from $1.09 billion. The OMB, in its budget summary, said that no more money is needed, since loan repayments have kept the fund flush. But Kane said the cutback would be especially hard on the Northeast and Midwest. Massachusetts would lose an estimated $12.2 million if the proposal is approved, he said.

The Low Income Home Energy Assistance Program, which helps pay for home heating for needy families, would be cut to $2 billion from $2.2 billion.

The program, which the Northeast-Midwest Institute says is reaching only 20 percent of eligible families, is especially weighted to states with colder weather like the Northeast.

The administration also has proposed ending federal subsidies for Amtrak, which critics say is inefficiently run and should be profitable. While Amtrak serves the entire country, the Northeast is particularly reliant on it, with its heavily traveled Northeast Corridor serving Boston, New York, and Washington.

''We are the United States of America, not a series of red vs. blue states," said Kennedy, who said he will fight the proposed cuts. ''Unfortunately, the president's budget divides America by undervaluing our cities and demonstrating that education and health care are not national priorities."

But even the feared elimination of Amtrak funding might ultimately help the Northeast, Reidl said, because the routes there are more commercially viable. The service in the West, for example, is more likely to die if it stops getting federal funds, while the Northeast Corridor service has a better chance of making it on its own, he said.

The Northeast is likely to benefit from one formula change: homeland security money would be allocated according to where the risk is highest, and lawmakers on Capitol Hill assume that large cities will benefit. Further, Democratic states would not be hit as hard as Republican states if the reduction and change in farm aid is approved.

That proposal would cut farm aid by 5 percent, and cap the amount a farm can receive. However, the plan faces a wary audience on Capitol Hill, because lawmakers mulling a presidential run in 2008 would need to explain to voters in Iowa -- who are first to vote in the nominating process -- why they voted to trim the aid.

Bush's budget director, Joshua Bolten, said support for the changes in farm assistance will come ''probably not from members who are in, or will be visiting, farm states. . . . Are we going to get everything we asked for? No. But I think we will get a lot of this."